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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-1979-181 <br />INSPECTION DATE 10/8/08 INSPECTOR'S INITIALS WHE <br />OBSERVATIONS <br />This inspection occurred as part of the Division's monitoring program of permitted operations. The Ruby <br />Trust Mine is a 110(2) type permit, approved for 2 acres affected area. The permit area is located <br />approximately 8 miles southwest of Ouray, at the outlet of Governor Basin. The Division holds $9,481 <br />financial warranty. Mine status is active. Six photos accompany this report. <br />Public access to the permit area is controlled by a locked gate across the entrance road. Affected lands <br />are well defined on the map and in the plans submitted under TR-01, approved October 25, 1999. <br />Affected lands were delineated sufficient to identify the permit boundary and verify containment of mining <br />activities within approved areas. <br />The old portal was secured by metal door, no discharge noted. The new portal decline was also secured <br />by metal door and was discharging approximately 12 gallons per minute. Mine drainage was routed to <br />the sediment pond located at the south end of the permit area. No discharge from the sediment pond <br />was observed. Mine discharge is permitted and monitored under CDPS permit CO-0037206. <br />The snow shed, previously extending from the underground shop, has been removed. New and/or <br />refurbished crushing equipment has been placed on the concrete pad remaining from the previous snow <br />shed. The conveyors for the crusher extend to the milling circuits located within the underground shop. <br />The milling equipment and circuits appeared new and custom built. Processing of ore with the new and <br />custom built equipment had not yet commenced. The Operator indicated that milling will utilize gravity <br />separation and no designated chemicals will be utilized; tailings are proposed to be placed underground <br />in the old mine workings. The Division is reviewing a technical revision to address reactivation of mining <br />and the new milling operation. <br />No problems or possible violations were observed. <br />Please be aware that annual reports always require a map of current site conditions, regardless of <br />whether any disturbance has occurred during the report year. <br />Response to this inspection report should be directed to the Division's office in Durango at 691 County <br />Road 233, Suite A-2, Durango, CO 81301, to the attention of Wally Erickson, phone (970) 247-5469. <br />Please note the change of address for the Division's office in Durango. <br />I & E Contact Address <br />NAME Wiley T. McCall <br />OPERATOR Mount Sneffels Mining Company. LLC <br />STREET 4366 Kinsey Road <br />CITY/STATE/ZIP Avon Park. FL 33825 <br />cc: Steve Shuey, DRMS <br />? CE <br />? BL <br />? FS <br />? HW <br />? HMWMD (CH) <br />? SE <br />? WQCD (CH) <br />X Harry Castle <br />Mt. Sneffels Mining Company <br />1653 CR 5 <br />Ridgway, CO 81432